PDIC increases maximum deposit insurance from P500K to P1M

Local

STARTING March 15 this year, maximum deposit insurance coverage (MDIC) will be increased from P500,000 to P1 million per depositor per bank, the Philippine Deposit Insurance Corporation (PDIC) announced.

PDIC Corporate Affairs Group Vice President Jose G. Villaret Jr. announced the adjustment during a media education forum titled “PDIC 101: Understanding Deposit Insurance” held on Friday, July 11, 2025 in Cebu City.

The media forum aimed to promote public awareness about the role of deposit insurance in protecting depositors and maintaining confidence in the banking system.

The new MDIC will apply only to deposits in banks that are ordered closed on or after March 15, 2025.

Deposits in banks closed prior to that date will remain covered by the current P500,000 insurance limit.

According to PDIC, the adjustment was based on two primary factors: inflation and the ratio of MDIC to gross domestic product per capita in comparable economies.

The last adjustment to the MDIC was made in 2009.

Republic Act No. 3591, as amended, authorizes the PDIC Board of Directors to review and increase the MDIC every three years, based on inflation or other economic indicators.

The P1-million insurance coverage will apply to deposit accounts in banking institutions such as savings, demand or checking accounts, special savings, time deposits, long-term negotiable certificates of deposit (LTNCDs), negotiable order of withdrawal (NOW) accounts, and Islamic deposits as defined under BSP Circular No. 1139.

Foreign currency deposits are also covered, in accordance with Republic Act No. 6426 and CB Circular No. 1389.

In the event of a bank closure, insurance payouts for such deposits may be made in the same currency.

The increase will not require any additional payments from depositors. PDIC clarified that the insurance assessment is paid by banks and not by their clients.

The assessment rate of 1/5 of 1 percent of total deposit liabilities will remain unchanged despite the increased MDIC.

To fund the expanded coverage, PDIC will utilize its Deposit Insurance Fund, which consists of premiums collected from member banks, reserves for insurance and financial assistance losses, and retained earnings.

Certain accounts remain excluded from insurance coverage. These include investment products such as bonds and trust accounts, fictitious or fraudulent deposits, accounts linked to unsafe banking practices, and funds tied to unlawful activities under the Anti-Money Laundering Law.

Deposits in non-banking entities such as cooperatives and non-stock savings and loan associations are also not covered.

All banking institutions licensed by the Bangko Sentral ng Pilipinas, including universal, commercial, thrift, rural, cooperative, and digital banks, are members of PDIC.

These institutions are required to display PDIC decals at their entrances, standees at teller and new accounts counters, and digital versions across online platforms.

The adjustment is intended to restore the real value of the MDIC set in 2009, reflecting inflationary changes and ensuring that the insurance system remains responsive to the evolving financial environment.

It also supports broader efforts to promote financial inclusion and ensure stability within the Philippine banking system.(MyTVCebu)